A couple of days ago, a young student approached me and asked me for some career advice. The student wanted to understand a little more about what banking and finance is about, and how it measures up in terms of their “dream job“. I was very impressed with this young student, because unlike many of their peers, they were actually trying to look at their future and start planning. This student, to be fair, is part of an advanced group of students. They get tutoring as part of their regular school day, they have additional instruction in note-taking and other study skills, and they are in advanced Math and English classes. They have a leg up over many students already. This young person seemed to have a leg up on even this group.

There was another teacher in the room at the time, who had worked in a similar field in her younger years, and we both shared some of the upsides and downsides, many of the really funny incidents, and some of the sad, sobering, almost depressing parts of our former jobs. See, no job is truly perfect. There are some good parts and bad parts, and much of adult life is about learning to deal with the bad parts while preparing for, waiting for, and whenever possible working to create the good parts.

And while just that much would have been a good enough lesson, that isn’t the main point of this post.

If you have been doing your job as a parent or concerned party of a young person, there is likely to be a point where they will ask you about career advice themselves. How you respond, what you say and how you say it, and your timing are crucial.

Once a young person asks your advice about future careers, they are putting the trust of their future in your hands!

So how do you respond?

“Follow your bliss!”

Some parents think this is great advice. They want their children to be happy in whatever they do. I’m not going to say that this approach doesn’t have any merit because I know that all parents want their children to be happy. Hell! I’m not even a parent, and I want other people’s children to be happy in their career. Happy people generally don’t make as many mistakes, and tend to do their jobs much better overall than their less happy peers. If that’s all it takes to be able to go to Taco Bell and not get my order screwed up or just ugly, then follow that bliss.

But there is a slight downside. For many kids, their bliss is playing video games or taking obnoxious pictures of themselves for Facebook. True, with a little creativity and some luck, you can make a career out of either of those, but neither has that ring of career aspirations that would make a parent proud.

“Follow the family!”

Okay, if “the family” is really The Family, I’m staying out of this argument altogether! But assuming that we’re talking about parents like my mom, who truly believe that following in the family business or doing the same job as your parents is a good thing, there’s a lot to be said for this method too. There is nothing wrong with upholding the traditions of your family, taking advantage of the skills and training from what may be generations of people who have done a job with love and with pride. I kind of like to believe that I’m in my family’s business as a teacher because my grandfather was a teacher in his home country. I get that I’m probably stretching a bit, but it makes me feel good.

But what if, like me with my mom, the family business just isn’t a good fit? Even if I went into my mom’s business of nursing and caring for the sick, that isn’t me either. One of my brothers works construction. He has three daughters that all together probably don’t have the upper body strength required to do what he does, plus it isn’t a very feminine job, and his daughters are very feminine girls. Should they, and I, have taken a job that we don’t enjoy? Even if it means that we will suck at it and embarrass the very people we were trying to please by doing the job in the first place?

“What’s important to you?”

The way I approached my student was to ask what was important to them. What are they looking for in a career? We also talked about what skills they felt they might want to strengthen. As we talked, I was able to throw a few different ideas their way, and as what they said changed, I was able to change my suggestions to fit their evolving priorities. Keeping in mind that this student is very young, and their priorities will change several times between now and when they become an adult, it was more important to get them to think in terms of what they want out of a job than it was to try to stuff them in a hole that might become a bad fit later on.

Is there a downside to this? Sure, I guess that the student might have felt a little unfulfilled when they came to a trusted advisor with the hopes of getting a concrete suggestion. I guess that walking away from a conversation where you hope to get answers with nothing but more questions can be annoying. I’m okay with that because this student needs the opportunity to decide things about themselves before they are going to be ready to plop down for a career that might last them the rest of their lives.

I don’t know why, but as I was having my conversation with my student, I kept thinking that someday they’d be alright. Of course, one of my favorite songs about someday is this one, and while it is a sad song, and possibly a little depressing, I’ve always enjoyed it and I hope you do too. Enjoy!

Let me start by apologizing for this being a longer post. I’ll try to keep it short, but I am covering like 30 years of history, so I beg a little grace from my awesome readers!

When I was young, from a very early age, I knew I wanted to be a teacher. I knew I was GOING TO BE A TEACHER. This might come as a bit of a surprise to many of the teachers when I was in school, but I knew that someday I would be among them as a peer, and not as a student. Because I liked to read, was good at writing, spelling, and grammar, I was sure I would be an English teacher. Like I said, my teachers didn’t have as much faith in my ability to become a teacher as I did, but more interestingly, my parents would frequently throw out alternatives to try and tempt me away from following my dreams. My dad was an X-ray technician who transitioned into being one of the very early MRI technicians when the technology was just becoming available. My mom would encourage me to follow in his footsteps, regardless of how loudly or excitedly I would protest that I wanted to forge my own path. I guess old habits are hard to break, because it was only in the last 4 or so years, when it was obvious that I was actually, no-kidding around, for reals, becoming a teacher, that she stopped with her brand of “encouragement”.

When I left high school, I was a little disillusioned about higher education or the prospect of being a teacher. I figured it would happen, but I was young and I wanted to take a little time to enjoy being outside of a classroom before I committed myself to being inside one again for the rest of my life. So I went into the exciting world of finance. I took a brief (15 or so year) sabbatical from my childhood dream, and I kind of dug it for a while, until I didn’t. Then I went back to school and was convinced that I was going to be a teacher again.

A strange thing happened during those 15 years. I got to enjoy other subjects. I was into economics of course, but tied in with that was government and history. I still say that each of those three have to be taught in tandem in order to be taught correctly. Currently our school system teaches one at a time, and almost in a vacuum, which has a chilling effect on the interest levels of students. But that’s another argument for another time. I decided that I didn’t really want to teach English after all. I decided that I was going to teach economics.

Over the past three years, I’ve had some very interesting teaching assignments. I’ve been able to teach incarcerated youth; I’ve taught in regular schools; I’ve even taught at some alternative schools that would break most peoples’ hearts (mine included). I’ve taught every subject, including subjects that I wasn’t able to pass when I was in school. I wound up avoiding those classes in favor of teaching subjects that I was good at.

Except one.

Never in my own academic career was I good certain subjects. I sucked at Woodshop, a fact that those who know me well understand. But worse than my ineptitude with carpentry was my absolute idiocy when it came to math. I could not do math. It was my worst subject ever. People used to ask me when I was in banking how I could do that job and still be bad at math. Luckily, there is this thing on top of most desks, called a computer, that does the math for me. Once, by pure luck, I was assigned to teach a math class at a school. Apparently, I did something right, because teachers at that school and others in the district have been passing my name around as a great math teacher because of the way I teach. It has gotten to the point where many people in the district think that I actually am a math teacher, and not a history, economics, government, or whatever teacher like my credential says. So I’ve made the decision to do what I need to do to actually become a math teacher.

I told my story because I hear from people every day who tell me that they are in situations that they never thought they would be in. They had a view of what their lives would be like when they grew up that wound up not matching reality.

I also see people with their noses stuck in books written by some very intelligent financial advice sales people. They make all their decisions based on what they believe this writer or that TV personality would suggest. They do all this to the exclusion of everything else that is going on in their lives. For some, it works as they hoped. For others, like those who try fad diets, fad financial advice is a round trip proposition. You get yourself into the position you planned on getting yourself into, only to relax back into your old habits. This leads to you getting into a deeper hole than the one you started in.

The answer is to be open to different paths while still keeping your eye on your overarching goal.

Is your goal to be able to send your kids to a college you couldn’t afford for yourself?

How about to be able to retire and live out your remaining years in a bungalow in Disney World?

Maybe your goal is as simple as being able to pay off your credit card and possibly taking your kids to Disneyland during spring break. It is important to have a plan, but when something comes around that messes with that plan, you have to be able to reevaluate your plan from the new point of reference instead of the original, where you started.

Whatever your goal is, life will sometimes get in your way. Sometimes your own decisions will get in your way, and sometimes the decisions of others will be responsible. Whether or not you make your goals depends in large part on how you react, on what decisions you make, and on your own ability to assess and deal with changes as they come up.

Whenever I think of my life, and all the twists and turns it has taken over the years, I think of a river. Whenever I think of a river, I think of this song. Because the original is somewhat sad and this is a weekend, I’ve also included a more up-beat version that always makes me laugh. Enjoy!

This is Anthony Miranda. He’s what many in the financial industry would call a dumbass. Actually, he’s what many in any industry would call a dumbass. You can click on his name to read the story, but here’s the gist: Anthony is a bully. He was a bully with a gun. Until he tried to mug a martial artist who didn’t feel like being a victim.

This is a video of a couple of kids where the smaller is a bully. It’s a short video, but the smaller kid appears to punch the larger kid a couple times before the larger kid has enough and slams the smaller kid to the ground. He then walks away.

This is NOT a call for violence!

These stories have been creeping up through the news lately, and while I personally abhor violence, there is a large part of me that thinks this is a good thing.

The other day, the school had a lockdown drill to practice the correct procedure if someone were to sneak on campus with the intent to hurt children. While we were in lockdown, one of the students started getting really afraid. She didn’t know what she would do if someone tried to hurt her (and before you start making fun of her, she was like, 11 years old. How would 11-year-old You react in that situation, hmm?). Some of the other students were a little cockier than others, and started bragging about how they would do whatever to anybody who came near them.

I got a little heated and told the kids that their goal was to get away from any situation where physical violence was a possibility and run for an adult they could trust. I shut down the bravado about how tough some of these kids were, pointing out that people with big mouths generally did more harm to themselves than good. Then the conversation drifted towards bullies.

Where I work, much like many schools across the country, there is a zero-tolerance policy with bullies. I’m okay with that. Where I have a problem is the advice that is too often given to the victims of bullying.

When you call self-defense “bullying back”, you are creating more victims!

I have a huge problem with the last half of that list because bullying is such a serious invasion of one’s person. We can’t teach our young ones to allow bullies to continue without being stopped.

How can you teach your young ones to deal with bullies?

1. There are certain limits to what other people are allowed to do to them. There is never a reason to allow someone to push or hit them. Also let them know that some adults have different “permissions” than others do. A doctor might be allowed to look at or touch places that other adults shouldn’t. Another kid who is close friends might be okay to wrestle with, but probably not an assistant coach from Penn State while in the shower. Use your judgment.

2. It is okay to say ‘no’ when anybody crosses one of your lines. It’s not okay for someone to hit your child and then try to intimidate them into not saying something about it to you or another adult.

3. Violence is never the answer. Except that sometimes there is no other alternative. Teach them to avoid violence whenever possible, but also explain the circumstances under which you are okay with them defending themselves physically, and develop a plan so that your child knows what to do and when to stop.

4. Invest in a good self-defense program. These don’t have to be expensive. Usually, there is some sort of program available through the YMCA or parks and recreation systems. If you can swing it, look into a private self-defense school. Just make sure you watch class and make sure the instructor understands and shares the values you have when it comes to your children. You don’t want to create a bully by teaching your kid how to deal with bullies.

How does this help anybody financially?

When kids are taught to put their heads down and cower from bullies, they often learn to cower from everybody. A particularly aggressive salesman can frequently bully people into making purchases that they don’t want or need. People who don’t know how to stand up for themselves will rarely even ask for a discount, especially when one is clearly warranted because they are afraid of a possible bully.

When a young person is taught to deal with bullies at a young age, they frequently also learn how to be more discerning and how to avoid making purchases or expenditures that they don’t want to make.

When most people hear this song, they focus on the part about not being weak and turning the other cheek. If at all possible, it is good to avoid especially physical confrontation. I personally stick around to hear the part about sometimes having to stand and fight when you’re a man. Enjoy!

Much to the chagrin of kids everywhere, schools across the country are dusting off marker-boards, straightening out rows of scissors and rulers, and setting up disgustingly saccharine displays with scalloped, corrugated, border trim depicting ancient blackboards and apples. Parents are flocking to discount stores to buy paper and notebooks, malls to buy the newest fashion for their little models, and electronic stores to buy data sticks, tablet pc’s and the newest “i-device” from Apple.

As much fun as all that is, and I personally love the smell of new school supplies, what students need, almost more than new shoes with lights and skate-wheels in them, are strong study skills. I’m all for studying and study skills, but I think a lot of adults need them just as much when it comes to personal finances as their kids do. The following is a list of skills that will work just as well for students of history and math as they will for people looking increase their own financial literacy. Advice for students is in red, while advice for personal finance is in blue.

1. Tape a copy of study guides for classes somewhere that you will see it often. Maybe the inside of your locker, or even to the cover of the book for that class. Also put up copies near your computer at home, or in other places that you are sure to see them. Doing this helps you to study without making it a chore. You have the ability to read a few lines while you are doing normal, everyday things. Repetition of information is the best way to learn it.

1. Keep pictures of things that you want to have near your modes of spending. Saving up for a new motorcycle? Wrap a picture of your dream bike around your credit card. Want to be out of debt completely, try keeping a copy of your latest credit card statement, with the balance owed circled in red where you can see it. Don’t think of it as shaming yourself into not spending, but think of it as providing a visual incentive to make better spending choices.

2. Make an appointment to study. With soccer practice, football games, church meetings and whatever else goes on in life, (like ditching all that stuff to hang out at the mall with the hot person you want to be seen with by everyone but your parents), it’s easy to forget to make time for actual studying. Make an appointment so you make sure you have time to study. Of course, that’s only half the battle. The other half is for you to actually meet your appointment.

2. Just like students, you need to make an appointment to reconcile your statements, plan your budgets, and pay your bills. Mrs. Finance For Youth has a schedule where she wakes up on Saturday morning, boots up the computer, makes a cup of coffee, and proceeds to pay any bills that came in during the week, reconcile any spending that we have done, and makes plans for the next week (like writing rent checks to be delivered on time, or checks to the gardener, or even allowances for herself and yours truly). Having a set time takes away a lot of stress and uncertainty because she can focus what is truly important and not worry about it again throughout the rest of the week.

3. Start your study sessions with your most difficult subject first. When I was in school, there were some classes that came easy to me. Like almost anything but math. It made no sense to start by studying for P.E. (which basically meant playing outside anyways), or even English (which I was really good at for some reason), when I had a subject that was so much more difficult and therefore demanded more time from me. I never learned this trick in school, but I do suggest you start with that hard class and use studying for your favorite classes as a reward later on.

3. Start paying that ugliest bill first. Maybe it’s the one with the highest balance, or maybe it’s the one with the highest interest rate. It might even be the one you are furthest behind in paying. Whichever it is, try to knock it out first, so that you can see easier bills in the future.

4. This one should be a no-brainer, but show up to school every day. All the studying in the world is only going to get you so far. When you show up to class, you will get information that might not be in the study material. You also get the benefit of learning the information that the teacher is going to test you on. Personally, I frequently use the phrase, “So, if you see a question on the test that says…,” which I follow by giving the students the answer that I’m looking for.

4. Show up to work! In general, you get paid when and only when you work. Some people have time off for vacation for which they get paid, and sometimes you are just too sick to be any good, but for the most part, work=pay! Think long term. Maybe you can get away with not being at work every day right now, but when you are looking for that promotion, your boss will take your attendance into consideration. It may be that the difference between you and another employee is that you are known to show up to work and the other person is known to slack off.

5. Don’t try to cram! Okay, we’ve all done it, but it almost never works out well. Instead of pulling one all-nighter on Sunday, just before a huge test, block out an hour or two every day to study throughout the week. Doing so will increase the likelihood that you will retain important information, cause less harmful stress to your body and health, and ultimately put you in a more relaxed state where success is more attainable.

5. People sometimes try to cram personal finance knowledge too. It doesn’t work here either. If you are already in debt up to your ass (assuming you own livestock), or higher, you aren’t going to get out of it instantly. Set out a plan that allows you to survive, but that still attacks the problem. You need to give yourself space to be able to succeed, but you need to also build in room for the occasional, inevitable setback. What happens too often is that people try to cram in “smart” financial decisions to such an extent that they are bound to give up and fail.

For many parents, this is the first year that they are dealing with the whole school thing. For others, back to school just means another haircut and a picture of your little one standing outside the front door, dressed and ready to go to school. Try instead to share some great strategies with your children on how to be successful, whether by my tips above, or others that you might know from other places. Let them know that you are also going to start something new and exciting to help the family. Make school and personal finances whole family events where you all share the journey and the rewards. Your kid gets good reports for a month and you pay off one credit card bill? Go for a round of miniature golf or something that the whole family can enjoy!

Way back in 2007, we started a conversation about references. Back THEN, I told you one part of asking for references. In a nutshell, we discussed the importance of being courteous, diplomatic, and grateful when asking someone to be a reference for you. I expanded on this point a lot in FINANCE FOR YOUTH: THE BOOK, especially for people with little or no actual job history. But what if you actually have some experience? Who do you ask? When do you ask? Why should you ask? These are the questions that young people (and not so young people, alike) need answered.

Asking for references can be dicey when you are asking your boss so that you can move on to greener pastures. You are putting yourself out there for all sorts of badness to occur. Your boss might decide to start making your job more difficult. Your boss might decide to not give a reference. Your boss might do both. These are risks that come with adulthood. You have to decide when and where you are willing to take those risks, or you risk getting a better job somewhere. The best advice I can give is for you to not wait until the last-minute. More specifically, there are a number of precautions you can take to help ensure that you can get a good reference when the time comes. Ideally, you will want to ask for a reference as you are leaving a company. That makes asking for references easy. But sometimes you are still working for one boss when you happen upon an opportunity that you just can’t afford to pass up.

Way before you start looking:

1. Be a good employee. This might sound stupid and not worthy of needing to be said, but you’d be surprised at how many young people (and older people as well) are perfectly mediocre employees for most of their time with an employer, only becoming model employees a short time before they ask the hapless employer for a letter of recommendation. This doesn’t work. You have to be a good employee ALL THE TIME! Employers look at your performance every day. They want to get a good feel for what type of employee you are. If you have a bad day, they can write that off as an anomaly. Or, if you are persistently a bad employee, your boss can write off the few good days before you ask for references as anomalies.

2. Take your time. Some employees barely get their permanent name tag before they decide they need to hit the dusty trail in order to find something better. Hey, that’s your right. You can jump from job to job as long as you can keep finding people to hire you. That’s one of the benefits to being young. But the other side of the benefit is the responsibility. If you decide to job-jump, you will most likely NOT get any reference from your employer.

3. Communicate with your boss. Let your boss know what your goals are at appropriate times and in appropriate ways. Don’t bad-mouth the company ever, but if your goals include a different path, be honest about it. When I worked at McDonald’s, my boss never had any illusions that I wanted to become a McDonald’s manager or owner. When I worked at my last financial institution, they knew that they were a temporary stopping place.

While you look:

4. Be clear. Let your boss know that you are considering putting in for another position, and let them know why. Again, don’t make it about what you aren’t getting from your current boss, but about all the opportunities that you will get from the new position. Who knows? Maybe your current boss can meet your needs. Especially in an economy like the one we find ourselves in currently, I strongly endorse keeping the job you have over hoping you can do better somewhere else.

5. Be classy. If you plan on asking your boss for a recommendation, give them the opportunity to say no without you getting butt-hurt about it. Going back to number one on this list, your boss has an opinion about you. Maybe they are trying to save you some embarrassment by not giving you a reference letter. Maybe they don’t feel comfortable with writing these kinds of letters. Maybe they don’t have the authority (they might work for someone else) to do what you need. No matter what, remember that you are asking them for a favor, not demanding your due.

6. Be Timely. Look, you’re already going to want to give your boss at least two weeks’ notice when you actually leave. If you are asking for a letter, you want to give your boss at least that much time to give your request the attention you deserve. Sometimes this isn’t possible, but many times you can give your boss at least a few days notice. Under no circumstances should you go to your boss and tell them that you need a letter in an hour!

I would like you to take a few seconds and answer this poll on the look of F4Y:The Blog.

FIRST, I told you about my parents‘ views on giving an allowance. To recap, they didn’t believe in giving money to children. They paid for everything we needed, but keeping money on our own was an exercise in creativity, subterfuge, and even on occasion shenanigans. Looking back, I think they might have been on to something because the majority of their children are gainfully employed and work our asses off for every cent we have. We also have learned to be savvy about protecting what is valuable to us. So, there are trade-offs to be made, but overall not a bad solution.

LAST WEEK, we talked about the concept of paying kids an allowance based on chores they do around the house. We found out that some of the biggest personal finance people out there like this idea. I, in typical Wil fashion, didn’t like that idea at all. Generally, I’m against turning family members into employees to the household. I think there are chores that need to be done at home, and offering kids money to do what they should be doing anyways just invites lazy, self-centered children in the future. It creates children that grow up to be gold diggers.

So what is left? Well, one argument that I’ve heard a lot about is just to pay kids an allowance because you want to pay them an allowance. No strings attached. This seems like the most honest approach. You don’t want your kids to go and earn money on the streets, where you plan on them learning about sex and drugs, so you want to keep them from opening that lemonade stand or selling pictures of their teenaged sister to the boys at school (wasn’t that an actual plot line in some 80’s movie?). You also don’t want to raise those aforementioned lazy self-centered little bastards, but you do want to start teaching your children how to handle the money they have wisely. So why haven’t I endorsed this method yet?

We’ve learned throughout history that money is a lot of things. Money has been attributed to each of the following things:

-Time

-Root of all evil

-Power

-Makes the world go round

-Talks

Later on in life, we learn that money has value, and part of teaching anybody how to handle money is to teach them to not make deals where both parties don’t benefit. Going back a couple weeks, my parents avoided making deals. They had expectations, and consequences for not meeting those expectations. One could argue, and I wouldn’t disagree, that we benefitted when we met those expectations because we didn’t have to suffer the consequences and we generally got stuff. My parents benefitted because their expectations were met which gave them a sense of pride in their children.

In the second example, the benefits are pretty well pronounced. They get stuff done, we get money. Simple, tidy.

In the last example, you take away the value of money for your children. If they don’t learn that money has value now, they will not understand that it has value later in life either. You actually create the opposite of a gold digger. You create children who don’t understand the concept of earning money.

After all that, after three weeks of talking about allowances, each method of determining how to pay allowances has serious, fatal flaws. It turns out that they all suck to one extent or another! So what is a parent to do?

Never fear, I’m here to help.

In order to most effectively handle the issue of children’s allowances, you need to do some hard work. That’s right; I said YOU have to do some hard work. First, you need to establish minimum standards that you expect your little ones to meet. These standards need to be appropriate for both age and developmental level. Second, you need to clearly communicate these expectations to your child so that there is absolutely no doubt. Whether you need a whiteboard chart to be posted on the fridge, or you need your older child to sign a contract acknowledging the minimum standards in grades, behavior, housework and chores, community involvement or any other criteria, make sure your kids understand what is the least you will accept.

Second, you need to establish privately what is the value you will ascribe to exceeding your minimum standards. For example, let’s say I’m slightly less stringent than AMY CHUAwhen it comes to academics. I only expect my kids to earn B- or higher. That’s their baseline. Now, my kid decides to overachieve and earn a B+. I might pay for that, if he has met all my other standards. Similarly, I expect my child to make her bed every day as the bare minimum in housework (I’m so much nicer to my imaginary daughter than my imaginary son; he has to clean the grout between shower tiles!). If she makes her bed and washes dishes (which isn’t assigned to anybody already), that might be worth something to me. The amount you pay must also be appropriate for your child’s age, developmental level, and your expendable, discretionary income.

Third, you need to communicate your pricing scheme to your children, but make it clear that they have to meet the bare minimum in all areas before any allowance can be earned. Your goal is to teach kids that some things just need to be done as part of their daily routine, just like in adult life, but other things will be done for money. Eventually, kids will start doing additional work on their own, in order to earn extra money. Ideally, they will approach you and negotiate a price that is fair to you and to them for certain things. Sometimes that price is zero, indicating that you believe that they should just do whatever as a matter of course, but others will be worth money.

Fourth, you have to be consistent. That doesn’t mean that you can’t increase your expectations, but until you do so, you have to pay the same amount for the same work every time.

Fifth, you have pair any money going to your child with solid education as to what to do with that money. Many people believe in giving to a church or a charity. If that is your thing, you need to educate your child as to the importance of doing so and the reasons why you are making them do so. Part of that education must include some level of allowing the child to make decisions on what they want to do with their money. I have no problem with telling your kid that they can spend only 10% of their allowance on frivolous things, but that should come with guidance that they don’t have to spend that 10% each payday, and that they can choose to save that money for something big that you wouldn’t necessarily buy for them yourself.

Doing this will start your child on a path to becoming financially independent and fiscally literate without spoiling them or forcing them to hide their money and their decisions from you.

Last week, I told you how my family dealt with the topic of allowances (Spoiler alert: They didn’t!), and gave some possible outcomes of that treatment. I’ve talked to a couple parents that do the same thing for much the same reasons. But there are other sides as well.

The most popular stance is, “pay allowances, but tie them to doing chores around the house” which does seem to make sense. The rationale here is simple. We are training our kids to understand that they earn money when they do a good job.

When asked, this is what Dave Ramsey had to say about allowances back in December of 2010:

I don’t do allowances for anyone. The word “allowance” sounds way too much like welfare to me. We put our kids on commission at an early age. If they worked, they got paid. If they didn’t work, they didn’t get paid. We put a little dry-erase board on the refrigerator and listed all the jobs they had to do during the week, with a dollar amount next to each one. When you did a certain job, you were paid that amount.

Keep in mind, though, kids shouldn’t get paid for every little thing they do around the house. There are some jobs they should have to do just because they’re part of the family, or because mom or dad tells them to do that job. Some of these jobs should have a higher purpose, too. As a parent, you want to find as many teachable moments for your kids as possible.

Once they’ve earned their money, sit down with them and divide it into three separate envelopes: one for saving, one for spending, and one for giving. This way, they get to learn about these three important things while they’re learning how to work.

Teaching kids that there’s an emotional connection between work and money is one of the best things you’ll ever do as a parent. If they learn this when they’re five, chances are they won’t be clueless and financially irresponsible when they’re 55!

—Dave

Suze Orman says:

If you have children, and you give them an allowance, I think you’re making a big mistake. Here’s how I think you should do it: There should be a list of chores around the house that they just have to do because they live in the house. Anything above and beyond those chores- if they do it- oh, you should pay them to do that work! Forget the allowance, pay them for work. I want you to be money minded so that you can save more and worry less.

Now, I know that it sounds like they are saying not to pay allowances at all, but if you really dig in there, they aren’t saying any such thing. What they are saying is that you should peg their allowance to the chores or work they do around the house. There is some upside to this. Maybe you get your teenaged kids to mow the lawn, wash the cars, or do other things that you might pay someone to do anyways. Maybe they learn a valuable lesson that will stay with them into adulthood. That sounds suspiciously like what we want for our children, right?

So is there any down side to this idea? Well, look at this possibility. If you pay your kids for some chores and not for others, which ones are going to get done? Even if you say ‘all’, which ones will get done better? But then, if you pay for all the chores, indiscriminately, you run the risk of socializing your kid into believing that it is right for them to only do something if there is a monetary incentive for them to do so. If that isn’t a problem for you, then it do it!

While I’m not a huge fan of this method (actually, I think it pretty well sucks, if you really want to know my feelings), I can’t say that it doesn’t work when used correctly. I can also see the argument as it comes from a mother who doesn’t work outside the house, but counts on getting her spending money to do the things she needs to do. If she is getting paid in this manner, how can it not make sense to pay her kids in the same fashion? In fact, that argument is part of why I don’t like this method. Personally, I consider it work when someone gets paid from outside the family. I don’t like the implications of a man (and let’s face it, it usually is a man who works outside the house) who works outside the house paying his wife to take care of the house. I think that cheapens all the work that she does, and lets him off the hook to support her as he promised to do when he married her. When it comes to kids, you are paying them to contribute to the family dynamic. I don’t like what that allows them to not do.

Next week, we talk about the parents teenaged me would have wanted. These are the parents that just give allowances because they can! In the mean time, this reminds me of a pushy kid trying to get paid for the work he did at home. I generally call them twerps!